Is there a difference in the yields of different types of investments? The accom

Question

Is there a difference in the yields of different types of investments? The accompanying data provide yields for a money market account and a five-year certificate of deposit (CD) for 25 banks. Complete parts (a) through (c) below. Click the icon to view the yields for money market accounts and five-year CDs. Click here to view page 1 of the table of critical values of t. Click here to view page2 a. Construct a 95% confidence interval estimate for the mean yield of money market accounts. (Type integers or decimals rounded to two decimal places as needed.)

Explanation / Answer

CI = x1 - x2 ± Z a/2 * Sqrt ( sd1 ^2 / n1 + sd2 ^2 /n2 )
Where,
x1 = Mean of Sample 1, x2 = Mean of sample2
sd1 = SD of Sample 1, sd2 = SD of sample2
a = 1 - (Confidence Level/100)
Za/2 = Z-table value
CI = Confidence Interval
Mean(x1)=0.874
Standard deviation( sd1 )=0.5774
Sample Size(n1)=25
Mean(x2)=4.366
Standard deviation( sd2 )=0.518
Sample Size(n12=25
CI = [ ( 0.874-4.366) ±Z a/2 * Sqrt( 0.33339076/25+0.268324/25)]
= [ (-3.492) ± Z a/2 * Sqrt( 0.0241) ]
= [ (-3.492) ± 1.96 * Sqrt( 0.0241) ]
= [-3.7961 , -3.1879]

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